Due to a number of factors, cost of transportation is becoming an increasingly important component of logistics planning and execution for retailers. Given that transportation costs and inventory costs pull in opposite directions, enterprises are struggling to find the right balance between the two.
For example, a buyer may be motivated to reduce inventory costs and by increasing the frequency of orders. However, more shipments can translate into increased transportation costs, which are typically borne by retailers. Transportation management systems (TMS) can combine shipments to some degree, but a transportation management system is constrained by the inputs provided to it which may not be optimal for the retailer in many cases.
The current state of the art is thus lacking in various respects.